Credit card quote of the week

I read an article this morning on CBC News that literally made me snarf my morning coffee.

Interchange fees, the fees that merchants pay on every credit card use, have gotten out of hand and there are numerous movements afoot to combat these increases. Not the least of which is a pending US Congress investigation. Our neighbors to the North in Canada are rebelling too.

The Retail Council of Canada has launched a campaign called “Stop Sticking It to Us” that is timed to garner the attention of their federal election on October 14th.

Canadians are paying the credit card companies roughly $2.00 on every $100 and it’s generally higher here in the US and it’s based in part on a percentage of the transaction, even though the actual cost of processing is the same for $10 or $10,000.

In response to the “Stop Sticking It to Us” campaign, Visa issued a corporate statement, the most ludicrous thing I’ve heard from them since their response to my interview with CBS Evening News back in 2005.

They said:

“It is important to note that retailers and consumers do not pay interchange. Retailers negotiate what is called a Merchant Discount or Service Fee (MDR) directly with an acquiring financial institution. Visa Canada sets its local interchange rates in response to the competitive Canadian market and they are designed to encourage retail acceptance.”

OK. So if merchants don’t pay these fees and pass them on to the consumer, then who does? Maybe it’s the tooth fairy.

Similar Posts:

• Visa Outlines Plan to Recoup Revenue After Durbin
• Interchange Fees May Drop
• Banks predicted to loose $5 Billion in revenue